Quite possibly because HAFA and HAMP have both lagged far behind in expected completions, the Treasury Department recently reviewed and eliminated some of the rules to make eligibility easier.

With the HAFA program being designed, in part, to catch and help those homeowners who fell out of the Home Affordable Modification Program. However, the program has had less than 1,000 short sales since its April 2010 launch.

Among the Treasury’s changes are that servicers are no longer required to verify a borrower’s financial information or determine whether a borrower’s total monthly mortgage exceeds the bar of the 31% debt-to-income ratio.

According to one Treasury spokesperson, “While this requirement has set the standard for mortgage affordability under HAMP, it is not as important for homeowners ready to transition out of their home. Eliminating this requirement further streamlines the process for homeowners applying to the program.”

Servicers are, however, still required to obtain a signed hardship affidavit.

Section 6.2.4.2, Chapter IV of the Handbook is amended to increase from $6,000 to $8,500 the amount a servicer may authorize the settlement agent to pay from gross proceeds to subordinate mortgage holder(s) in exchange for a lien release and full release
of borrower liability. Investors will continue to be reimbursed one dollar for every three dollars of short sale proceeds paid to a subordinate mortgage holder up to $2,000.

All borrowers must now receive a short sale agreement within 30 days of the request.

The best way to assure your short sale is not yanked for the homeowner to go try a loan mod after you are listed it is to .... make sure your borrower seek the HAMP program first, then HAFA. Also, if you run out of time (120 days) ask for an extension.

Discussion Forum

Hello,1st Lien Holder is serviced by Citi, Fannie Mae is Investor, who has filed a LIs Pendance. 2nd is HELOC with Wells FargoCiti is not short in the sale, but Wells Fargo will be short. Will this…Continue

I just got off the phone with the short sale department at OCWEN, and they are saying that they still participate in hafa, but they don't have to issue a pre-approval letter. I thought that was the…Continue

I just had a investor turn down a HAFA short sale because the appraisal that they ordered is too low. It seemed spot on to me. Now they want me to sell the property as a regular short sale for an…Continue

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I looked at the link Rosemary provided that shows the lenders who have signed up for the HAMP program. Does that mean they will automatically agree to do the HAFA program on April 5th? Does anyone have any good links for the HAFA program? Everything I seem to pull up talks about the HAMP program which is a waste of time.

B of A was the first to sign up... but they so far on my files are totally ignoring the guidelines. I am totally frustrated with only being able to discuss one client per call. Does anyone have a solution to this?

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